Business Shop Study Flashcards

W-2

A form used to report taxable income that a worker received during the calendar year. *You must get this form from your employer by January 17th.

1040EZ

The short tax return form designed for single and joint filers with no dependents or itemized deductions.

Disposable Income 

Money Available to Spend or Save After Taxes Have been paid

Profit sharing

A benefit that allows employees to share a portion of the business’s profits:Perks

W-4

used by an employee to tell their employer how much federal income tax to withhold from their paycheck.

I-9

to verify the identity and legal work authorization of every new employee hired to work in the United States

1099-INT

report interest income

1099-DIV

to report dividends

Direct Tax

 are paid straight to the government based on income or wealth (like income and property taxes) and cannot be shifted

Indirect Tax

Indirect taxes are applied to goods and services . Indirect taxes are applied to goods and services (like sales tax), collected by businesses, and passed down to the end consumer.

Progressive

A progressive tax takes a larger percentage of income from high-income earners as they make more money

Regressive

takes a larger percentage of income from low-income earners because everyone pays the same flat rate or fee regardless of earnings.

Unemployment Compensation

temporary money the government pays to people who lose their jobs through no fault of their own

Salary

The amount paid to a worker every year, even if it is paid in twelve parts, one per month.

Wage

Amount paid to a worker every week. Wage can also refer to the amount of money paid to a worker per hour.

Sales Tax

 A tax levied as a percentage of the purchase price of goods and services sold to consumers 

Use Tax

A tax charged on the use, storage, or consumption of a good that was purchased in one state but used in another state

Excise Tax

Tax charged on the purchase of specific goods and services

How is property taxes calculated?

Property Tax= (Taxable Assessed Value x Tax Rate) - exemptions 

How to Calculate percentage

(Part ÷ Whole) × 100

Mandatory taxes you pay and what they are for 

Income Tax: A portion of one's personal income paid to a government.

Social Security Tax: A social insurance system that provides benefits to most Americans who are retired, sick, or too disabled to work, and to families of workers who have died

Medicare Tax: A social insurance program that extends health coverage to almost all Americans age 65 and over.

Federal, state, local

Voluntary taxes that are taken out of your paychecks

Health, dental, Vision Insurance, 401k 

Commission

 A set fee or percentage of a sale paid to an employee instead of or in addition to salary or wages

Benefits

Forms of compensation in addition to salary or wages

Disposable income

Money available to spend or save after taxes have been paid

• Pay Without Work

Sick leave

Paid time away from work due to illness

Personal leave

Paid time away from work for personal reasons

Retirement plan

An account into which employees voluntarily contribute a portion of their earnings for their retirement; employers may match these contributions

Profit sharing

A benefit that allows employees to share a portion of the business’s profits

Unearned income

Money received from sources other than working 

Earned income

 

Wages

Salaries

Tips

Commissions

interest and dividends

They can also receive income from investments

wages and salaries

People receive income from working

Another source which help people who do not have enough income to pay for basic needs.

government transfer payments,

Workers also receive benefits such as

paid vacations and sick leave.

When it comes to your income, benefits, and taxes, you should

Understand all sources of income (earned and unearned).

Determine which employee benefits you value the most as part of a compensation package.

Be aware of paycheck deductions.

Know what types of taxes you have to pay.

Know which tax forms to file.